Irish Crime and Punishment: the corruption of Charlie Haughey

I left Ireland after Christmas with the nation in a strange time warp that reminded me of the 1980s. The current economic crisis was superficially similar to how it felt at the time when I first left the country 24 years ago. The similarities were still there this week as the Dell plant in Limerick closed with the loss of 1,800 jobs. The country offered nothing to me in 1985 and I felt a more interesting life could be had first in Britain and then in Australia. While I wasn’t an economic refugee, 1980s Ireland was a mostly stagnant pool. At the start of that decade the Magill journal published the shocking news that 1 million of the country’s then 3.2 million citizens were living below the poverty line. As the decade developed, things seemed to be getting no better. A falling growth rate, rising unemployment and excessive government borrowing suggested the country was heading towards disaster.

Yet the disaster never eventuated. In the 1990s, Ireland reinvented itself on the back the almighty dollar. Ireland was a suddenly a Celtic Tiger riding an exhilarating wave on the tech boom. Numerous US multinationals (Dell included) were enticed into the country with dubious tax sweeteners. By 2000, the economy was self sustaining and the construction industry had taken over as the most profitable sector. After spilling its people out for its first 60 years, the Irish state was suddenly actively recruiting, both from within the Irish Diaspora and without. The social make-up underwent extreme change.

I said the current crisis was only superficially similar to the crisis of the 1980s. For starters there is now money in the country. There is also a new and talented pool of individuals who like millennia of invader generations before them “have become more Irish than the Irish themselves”. There is also no Charles Haughey, the thief-in-chief who cast a long shadow over the Irish polity from when he emerged as bright but opportunistic junior minister in the 1960s to his retirement in scandal in 1992. British files from 1978 recently released under the thirty year rule described him even then as likely to be corrupt and as someone who “associated with the nouveau riche of the Dublin business world”.

I am reminded of these things after reading a book on the long trip home by Waterford-born Oxford academic Roy Foster. Called “Luck and the Irish: A brief history of change, 1970-2000”, it is an enjoyable and forensic examination of the main reasons for change in Ireland in those hectic 30 years. For better or worse, and it is mostly worse, Haughey was a major figure through much of the era.

Charles J. Haughey became a notorious figure in 1970 when he survived unscathed out of a murky Arms Trial. Haughey and fellow Fianna Fail minister Neil Blaney were arrested and charged for attempts to import arms into the state for use in the North. Then Taoiseach Jack Lynch sacked him from the cabinet (but restored him after a few years in exile). Haughey was acquitted but contradictions in testimony suggested there had been more covert government acquiescence than appeared in court. Haughey retreated to the back benches to the disgust of many who wanted him sacked from the party.

Haughey went back to his party machine to lick his wounds. While he kept a low profile, there were compensations. For starters, he had become exceptionally rich. His academic degrees in commerce and law enabled him to establish a successful accounting business, but as Foster notes, Haughey’s “way of life soon outpaced even that of the richest of his clients.” He used his own windfall tax act to avoid paying duties on a Georgian house he sold at a massive profit in 1969 and moved into the 250 acre Abbeville Mansion at Kinsealy. He added to his portfolio with a stud farm in Meath, a large yacht, and the ultimate status symbol, his own island Inishvickillane, off the coast of Kerry.

No one could tell quite how he could afford it all. After 1960 he was no longer active in the accountancy business and lavishness wasn’t viable on a slender government minister’s salary. Yet no one cared, apart from his bank manager. By the end of the 1970s his personal debt at the Allied Irish Banks quadrupled to a million Irish pounds and was becoming a serious embarrassment to the bank (though not to the politician, who full of chutzpah, solemnly told the people of Ireland “they had been living beyond their means”). By then, he was Taoiseach and in a position to ignore AIB’s complaints about the money he owed them.

His ascension to the top job stunned most of his government colleagues. When Jack Lynch retired, his designated successor George Colley had the support of 22 of the 25 government ministers. But Haughey assiduously worked the back bench and won the ballot. Jack Lynch retreated in shock to his native Cork and although he lived on for another 20 years studiously avoided all further party activity.

Becoming Taoiseach did not change Haughey – his main interest was the accumulation of wealth. His financial go-between Des Traynor transferred bank debts by collecting “loans” (in practice, never paid back) from businessmen and moving the balance to heavily shielded accounts in the Caymans. Haughey surrounded himself with corrupt politicians such as Padraig Flynn and Sean Doherty who followed their master’s venal habits. Haughey also gained control of Fianna Fail party funds and many donations ended up in his pockets aided by the blank cheques provided by naively trusting party secretary Bertie Ahern (who would eventually inherit Haughey’s leadership mantle in 1997).

Haughey’s shonky dealings gave no indication that a major economic recovery was just around the corner. The economic crisis meant most of his 1980s budgets were hairshirt affairs. The burden of taxation was unfairly borne by salaried employees while farmers (and some politicians) paid virtually nothing. When Haughey was returned to power in 1987 after a gap of almost five years, the country was making slow steps to what would become an astonishing transformation. Much of the early wealth was skewed. Although Ireland was beginning to get a dividend from EU membership, large farmers fared best from the Common Agricultural Policy. Agribusiness also benefited from phony export credits. Meanwhile property developers made money from tax breaks and land rezoning.

It wasn’t until the late 1990s that politicians began to be called to account for their crimes in a series of tribunals. The McCracken tribunal found the offshore accounts but luckily for Haughey, Traynor his bookkeeper was dead by then and the secrets of who owned the money died with him. The Flood Tribunal showed Fianna Fail cabinet members had accepted bribes from businessmen for land deals. By the time of the Moriarty Tribunal it was clear Haughey was the biggest offender. The tribunal found he had taken payments of 12 million euros between 1979 and 1996 for “services rendered”.

But by then Haughey had long retired. In 1992 his position as leader became untenable after a series of party room blunders. Finance minister Albert Reynolds positioned himself for a spill. After a sacked and embittered Sean Doherty revealed Haughey had ordered phone taps of unfriendly journalists ten years earlier, the game was up. For the remainder of his 14 surviving years, much of his remaining reputation withered as further revelations of his malfeasance emerged. His death in June 2006 was marked with mixed commentary. The best I could say of him at the time was “he was the first quintessential modern politician in Ireland. He was driven by desire not by dogma.” Having read Foster’s account, I’m even less inclined to be charitable. Haughey was a criminal who infected the body politic for decades and made corruption acceptable at the highest levels. Ireland is a far better place for his passing.